Despite strong year, Lowe's remains cautious in 2014

Home improvement store posts 5.6% increase in sales

Home improvement store Lowe's (LOW) reported net income of $306 million for the fourth quarter ended Jan. 31, up 6.3% from the same period a year prior.

Earnings per share increased 11.5% to 29 cents from 26 cents in the fourth quarter of 2012.

For the full year, net earnings increased 16.7% to $2.3 billion and earnings per share grew 26.6% to $2.14.

When it comes to sales numbers for the quarter, Lowe's recorded a 5.6% increase to $11.7 billion from $11 billion in the fourth quarter of 2012.

For the fiscal year, sales reached $53.4 billion, up 5.7% over fiscal year 2012.

"During the quarter, we delivered solid performance in core home improvement categories, balancing softer sales of seasonal gifts and holiday decorations. When extreme winter weather arrived late in the quarter, our distribution network responded quickly and efficiently to move product where it was most needed," Robert Niblock, Lowe's chairman, president and CEO, said.

Looking ahead, the company estimates that total sales will increase approximately 5%, while earnings before interest and taxes as a percentage of sales are expected to increase approximately 65 basis points.

Earnings are heavily driven by employment, home prices, housing turned and homeownership levels, and if those bode well, it should create a more favorable environment for consumer spending, the earnings noted.

“Our Consumer Sentiment Survey suggests a continued willingness for consumers to invest in their homes,” the report stated. “However, there has been a recent slowdown in both housing activity and jobs growth which makes us cautious.”

Brena Swanson is the Digital Reporter for HousingWire.com, providing expert coverage on Millennials, lending and housing. Brena joined the HousingWire news team in February 2013, also serving in the roles of Reporter and Content Specialist. Brena graduated from Evangel University in Springfield, Missouri. Follow Brena on twitter at @BrenaSwanson.

This month inHousingWire magazine

While other state and federal regulatory bodies overlap in their regulation of the mortgage industry, the very particular consumer focus of the CFPB is not duplicated by any other body. Will deregulation mean a return to the Wild West lending atmosphere that led to the financial crisis? What happens next? We asked John Socknat, partner at Ballard Spahr, to weigh in on what mortgage lenders and servicers can expect from a Trump administration.

Feature

Amid the potential new direction from the White House, Congress and regulators, leadership in our industry is more important than ever. Which is why HousingWire is proud to present the 40 winners of our 2016 Vanguard award. These leaders from all segments of the mortgage ecosphere demonstrate that our industry is more than capable of meeting the challenges that lie ahead.

Commentary

The marketplace is full of hard and private money lenders — it will come down to who can best assist investors in completing their goals, whether that be by providing quicker close times, or with more accurate valuations. With how many options there are for borrowers, lenders will need to start competing for marketshare as borrowers shop their situations to multiple lenders, leveraging the offers against each other. This process will force lenders to update their guidelines, or be forced out of the market.